Introduction to Specific Performance in contract

You finally secure a deal to purchase a prime piece of land in Lagos, perfect location, proper title, and agreed price. You pay a substantial part of the purchase price. Suddenly, the seller backs out and decides to sell to someone else offering a higher price.

You are offered a refund. But you don’t want your money back, you want that exact property. This is where the law introduces a powerful equitable remedy known as specific performance in Nigerian contract law. It steps in where monetary compensation is inadequate and compels a party to fulfil their contractual obligation.

WHAT IS SPECIFIC PERFORMANCE IN CONTRACT?

Specific performance in Nigerian contract law is an equitable remedy by which a court orders a party to carry out their contractual obligations as agreed, rather than merely paying damages.

It is typically granted where:

• Damages are insufficient to compensate the injured party
• The subject matter of the contract is unique
• Justice demands actual performance. BPS Construction & Engineering Co. Ltd v. FCDA (2017) LPELR-42516 (SC) 

Thus, specific performance in Nigerian contract law is not automatic, it depends on the circumstances of each case.

LEGAL BASIS OF SPECIFIC PERFORMANCE IN CONTRACT

The doctrine of specific performance in Nigerian contract law is rooted in equity and has been consistently applied by Nigerian courts. Courts rely on:

• General principles of contract law

•  Equitable doctrines

•  Judicial precedents

In Adedeji v. National Bank of Nigeria Ltd (1989) 1 NWLR (Pt. 96) 212 (SC), the Supreme Court held that specific performance may be granted where the contract is valid, enforceable, and damages are inadequate.

 

WHEN WILL COURTS GRANT SPECIFIC PERFORMANCE IN CONTRACT?

The key issue is: when will courts grant specific performance in Nigerian contract law? Courts will typically grant this remedy in the following situations:

1. Where the Subject Matter Is Unique

Specific performance in Nigerian contract law is commonly granted where the subject matter cannot easily be replaced. This is especially true in land transactions or rare goods or property. In Ogunbambi v. Abowaba (1951) 13 WACA 222, the court recognised that land is unique and damages may not adequately compensate a purchaser. More recently, the Court of Appeal in Ogunleye v. Oni (2023) LPELR (CA) reaffirmed that contracts involving land are prime candidates for specific performance due to their unique nature.

2. Where Damages Are Inadequate

The central principle behind specific performance in Nigerian contract law is inadequacy of damages. In BPS Construction v. FCDA (2017) LPELR-42516 (SC), the Supreme Court emphasised that the court must be satisfied that damages cannot sufficiently remedy the breach. For example, loss of a unique business opportunity or loss of irreplaceable property. In such cases, monetary compensation is not enough.

3. Where There Is a Valid and Enforceable Contract

Specific performance will only be granted where there is a valid contract. In Best (Nig.) Ltd v. Blackwood Hodge (Nig.) Ltd (2011) 5 NWLR (Pt. 1239) 95 (SC), the Supreme Court held that the existence of a binding contract is a condition precedent for granting specific performance. This reinforces that specific performance in Nigerian contract law cannot arise where the contract itself is defective.

4. Where the Claimant Has Performed Their Obligations

A party seeking specific performance must show that they have fulfilled their own obligations under the contract. In Union Bank of Nigeria Ltd v. Ozigi (1994) 3 NWLR (Pt. 333) 385 (SC), the court emphasised that equity demands that the claimant must come with clean hands. Thus, specific performance in Nigerian contract law is only available to parties who have acted fairly.

5. Where the Contract Is Certain and Clear

Courts will not enforce vague or ambiguous contracts. In Orient Bank (Nig.) Plc v. Bilante International Ltd (1997) 8 NWLR (Pt. 515) 37 (SC), the Supreme Court held that specific performance cannot be granted where the terms of the contract are uncertain. Clarity is therefore essential in invoking specific performance in Nigerian contract law.

SITUATIONS WHERE SPECIFIC PERFORMANCE IN CONTRACT WILL NOT BE GRANTED

Although powerful, specific performance in Nigerian contract law is not granted in every case. Courts will refuse this remedy where:

1. The Contract Involves Personal Services
2. Damages Are Sufficient
3. the Contract Is Void or Illegal
4. Performance Is Impossible
5. There Is Undue Hardship

CONCLUSION

Specific performance in Nigerian contract law is a powerful equitable remedy designed to ensure that justice is done where damages are insufficient. Ultimately, specific performance in Nigerian contract law ensures that parties cannot escape their obligations simply by offering compensation especially where what was promised cannot be replaced.

Contributors

OJIENOH SEGUN JUSTICE, ESQ.,

Lead Partner, EKO SOLICITORS AND ADVOCATES

Ogunleye Ayomide Faith

Graduate Trainee, EKO SOLICITORS AND ADVOCATES